Discussion in 'Trading' started by Comptalk, Dec 17, 2006.
Can someone please explain to me what swing trading and scalping is? Thanks.
I am sure many will harp in and give very detailed definitions. However, in general, the difference lies in the time you are in trades. Swing trades are usually longer term trades (think in days and possibly weeks) versus "scalping" which usually refers to getting in and out of trades very quickly (usually seconds or minutes).
Of course, the time range can be a very wide continuum.
I see. In terms of scalping, don't you need a few thousand share position in a stock in order to make a decent profit? When I usually only purchase 300 - 500 shares at a time, scalping would not really work for me... Right?
I would be more concerned with having the proper trade execution platform, commissions/fees and computer equipment that's required for scalping.
I've met too many scalpers that are already losing before the first trade of the day due to the fact they don't have competive fees, improper/inadequate trade execution platform or poor computer equipment tools...
All the above has an enormous impact on your profits/losses.
Whereas, I've met a few successful swing traders that call in the orders to their brokers by the telephone.
Swing trading is when I earn profits. Scalping is when I give them back to my broker in the form of commissions.
I have made as much as 700 bucks a day trading 40 shares but I to make about 200 trades in order to do it.
When decimalization kicked in, scalping (the way most did it) died...
Swing trading and position trading is your best path, my thread opening Brother...
Scalping allows you to respond almost instantaneously to unexpected changes in supply and demand. You're less a victim of news and geopolitical risk. But fees and software are key, as the previous poster mentioned.
Every time the market changes there is always someone claiming that this or that type of trading is dead. If a trader's edge is based on proper trading techniques that follow from understanding supply & demand and risk management (and not something narrow like bullets or rebate trading), s/he will survive, regardless of the time frame. There are always stocks out there that move a point a day.
Scalping is when your neck muscles ache, your heart races and you have trouble breathing.
Swing trading is when you enjoy a nice lunch and take a relaxing walk on the beach
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